Proceeds from the issuance of the Notes, net of expenses, will be used to repay in full a $300m term loan credit facility

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Ardagh launches senior secured notes. (Credit: Ardagh Group S.A)

Ardagh Group has launched an offering of $500 million Senior Secured Notes due 2025 (the “Offering” and the “Notes” respectively).

Proceeds from the issuance of the Notes, net of expenses, will be used to (i) repay in full a $300 million term loan credit facility, entered into on March 20, 2020 and drawn on March 23, 2020, (the “Credit Facility”) and (ii) for general corporate purposes.

Trading Update
Ardagh expects to report Adjusted EBITDA for the first quarter of 2020 in line with its guidance of $270 million, with no material impact from the recent outbreak of COVID-19 during the quarter.

Overall demand has remained resilient to date, reflecting our focus on the beverage and food end use categories. Operationally, we are a core part of the supply chain and all our production facilities have continued to operate normally. Our supply chains have also continued to function satisfactorily to date.

We ended the quarter with total cash and committed liquidity of $1.1 billion, including approximately $950 million in cash on hand. This includes proceeds from the Credit Facility and does not include proceeds of the Offering.

Pro forma for this Offering, total cash and committed liquidity would increase to $1.3 billion, including approximately $1.15 billion in cash.

Recent Developments
COVID-19
The outbreak of COVID-19 and measures to prevent its spread, including restrictions on travel, imposition of quarantines and prolonged closures of workplaces and other businesses, including hospitality, leisure and entertainment outlets, and the related cancellation of events, may impact our business in a number of ways. This is expected to include an adverse effect from reduced global economic activity and resulting demand for our customers’ products and, therefore, the products we manufacture. It may also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce. The COVID-19 impact on capital markets could also impact our cost of borrowing.

Although it is currently too early to estimate, we expect the ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial and operational results, will be determined by the length of time that such disruptions continue which will, in turn, depend on the duration of the COVID-19 pandemic and the impact of governmental regulations that might be imposed in response to the pandemic.

Source: Company Press Release